SoCal Edison wants to slash rooftop solar incentives

If you’re thinking about going solar, you might want to do it sooner rather than later.

California’s major utilities — Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric — have proposed major cost increases for new rooftop solar customers. Clean energy advocates say the changes would make solar far less affordable for homes and businesses than it is now, crippling the state’s booming rooftop solar industry.

Solar advocates want state lawmakers to instruct the California Public Utilities Commission to reject the proposed changes. With two weeks before the Legislature adjourns for the year, they’re aggressively lobbying lawmakers.

“We really need the Legislature to step in and save the day,” said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association, a trade group. “There is absolutely no nuance in the utilities’ proposals. It’s an all-out attack on consumers being able to generate their own electricity.”

Under Edison’s proposal, new rooftop solar customers would be paid 8 cents per kilowatt-hour for the excess solar electricity they send onto the grid, compared to the 15 cents per kilowatt-hour they’re generally paid today. They’d also be charged a flat monthly fee based on the size of their solar system, at $3 per kilowatt, per month.

Edison estimates typical solar consumers would see monthly bills of about $135 under the new system, compared to about $65 now — a difference of more than $800 per year. Del Chiaro’s trade group estimates it would take the average Southern California Edison customer about 20 years to break even on a solar system under the proposed changes, with payback periods of 17 years for Pacific Gas & Electric customers and 26 years for San Diego Gas & Electric customers.

Edison and other utilities say rooftop solar customers aren’t paying their fair share to use the electricity grid, hence the need for changes. If they don’t start charging solar customers more, utilities have argued, costs will increase for homes and businesses that don’t have solar panels.

“Solar customers remain connected to the power network, which provides them energy when the sun is not shining, when bad weather blocks its rays or when the home uses more power than the rooftop system produces,” Caroline Choi, Edison’s vice president for energy and environmental policy, said in a blog post on the company’s website.

Clean energy advocates see the proposed changes as part of an effort to cripple rooftop solar, which has increasingly threatened the utility industry’s traditional business model. The solar industry employed nearly 55,000 people in California last year, with more than 150 companies doing thousands of installations in the Coachella Valley alone.

“Customers going solar today are doing so to save money, by and large,” said Walker Wright, director of public policy at Sunrun, a national solar company based in San Francisco. “The new proposals that we’re seeing simply wipe away the savings that solar companies are currently offering to their customers.”

Solar advocates say an element of Pacific Gas & Electric and San Diego Gas & Electric’s proposals is particularly harmful: a “demand charge” for solar customers. That charge would be based on a homeowner’s highest demand in a given month.

In Arizona, the Salt River Project — which provides electricity for much of the Phoenix metro area — imposed a demand charge earlier this year, with the blessing of state regulators. In a lawsuit against the utility, national powerhouse SolarCity alleges solar applications dropped 96 percent after the demand charge was implemented.

“There is a dead body out there, which is (Salt River Project) in Arizona. That’s a real live decision, not just someone saying, ‘The industry will end,’” Walker said. “It’s creating a great amount of anxiety within the rooftop community in California today.

Utility companies say consumers would still save a lot of money by going solar under their proposals, and falling costs will continue to propel the industry forward.

“SCE’s proposal would make changes to ensure costs are more equitably shared by all, while continuing to provide for a robust rooftop solar market,” Choi said in her blog post.

The California Public Utilities Commission is under a legislative mandate to develop a new system for incentivizing rooftop solar by the end of this year. Homes and businesses that sign up for the current incentive program, known as “net energy metering,” will be grandfathered into the system that exists now.

Until recently, advocates wanted lawmakers to count rooftop solar toward the 50 percent renewable energy mandate requested by Gov. Jerry Brown, which legislators are expected to approve next month. That would provide some certainty for the industry, they argued, while potentially influencing the brewing incentive battle in their favor.

That push failed to gain traction, though, so advocates have changed tactics. Now they want lawmakers to provide specific instructions to the California Public Utilities Commission: Keep solar incentives largely the same as they are now, at least through 2020.

That kind of certainty is critical for the industry as it faces an “unprecedented triple threat” over the next 15 months, Del Chiaro said. On top of the proposed changes to California’s solar incentives, a 30 percent federal tax credit for solar is scheduled to expire at the end of 2016. Then there are the electricity rate changes approved last month by the public utilities commission, which critics say will make rooftop solar less attractive for some homeowners.

“We’re trying to help more people afford to go solar, not less. This is the absolute opposite direction that the state of California is supposed to be going,” Del Chiaro said, referring to the utility proposals. “The last thing this Legislature wants to do, in a year in which it’s prioritizing clean energy, is to see the loss of tens of thousands of jobs.”

Sammy Roth writes about energy and water for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.